MNUCHIN BACKTRACKS ON GUNS — For about an hour on so on Thursday it appeared that Treasury Secretary Steven Mnuchin had staged a surprising break from the Trump White House and endorsed congressional action on gun violence in the wake of the devastating school shooting in Florida that left 17 dead.

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This is what he said at a House Ways and Means Committee hearing: “I will say, personally, I think the gun violence — it’s a tragedy what we’ve seen yesterday, and I urge Congress to look at these issues.”

Tweets began flying that Mnuchin, a highly loyal member of the Cabinet, had simply had enough on guns and was going his own way. His office moved quickly to argue that was absolutely not the case. Instead, Mnuchin was referring to whether there was money in the federal budget to examine the proliferation of mass shootings in the United States, not whether Congress should consider new gun control laws.

Treasury spokesman Tony Sayegh told me: “Secretary Mnuchin was directly addressing Congressman [John] Lewis’ question about availability of funds in the budget to address the issue of gun violence. He also reflected the feelings shared by all Americans that yesterday’s school shooting was a profound tragedy.” Read more.

TOP TWEET— @joshdawsey after I reported the Mnuchin dial-back: “That was fast.”

THE WHOLE EPISODE served as a reminder of how the GOP is completely locked into a political position that cannot countenance even the idea that Congress might examine whether new limits on assault style weapons might be part of a response to children (and adults) getting massacred at an escalating pace.

This despite polls that suggest widespread support for a return of the Assault Weapons Ban that lapsed in 2004. The power of the NRA and gun rights enthusiasts in GOP primaries make it incredibly difficult for members of the party to come anywhere near a discussion of gun control. Not clear what could change that.

IMMIGRATION EFFORT FAILS — Speaking of issues on which Congress cannot make any progress, the brief Senate attempt to forge a deal on an immigration bill collapsed on Thursday. Not at all clear why the effort can’t continue. But Senate Majority Leader Mitch McConnell says it can’t. So it won’t.

POLITICO’s Elana Schor and Burgess Everett with the details: “The Senate's much-hyped immigration debate ended in a megaflop on Thursday. Every proposal … considered fell short of the Senate's 60-vote threshold, leaving the undocumented immigrants known as Dreamers in limbo and lawmakers with nothing to show for weeks of negotiations. …

“A bipartisan agreement was rejected 54-45, after a furious White House campaign to defeat it, including a Thursday veto threat. It would have given an estimated 1.8 million undocumented immigrants a path to citizenship while spending $25 billion on border security. …

“But in a blow to Trump, a GOP amendment to enshrine his four-part immigration framework, including cuts to legal immigration, was defeated by even wider margin — 39-60. The upshot is stalemate, despite long-running negotiations, particularly among the bipartisan group of mostly moderate senators.”

SAY WHAT? — The White House statement on the failed effort accused Dems of “filibustering” the proposed amendment that only got 39 total votes. That’s not how it works. That’s not how any of this works.

GARY COHN NOT WORRIED ABOUT OVERHEATING — NEC Director Gary Cohn rejected the idea that tax cuts and deficit spending would overheat the economy in remarks at a DC tax conference, per WSJ’s Nick Timiraos and Richard Rubin: “We’re not worried about overheating in the economy. I know it’s what people are talking about.

… We know how to deal with inflation. We don’t know how to deal with deflation in this country … Ultimately deficits do matter. We don’t really have a choice here. We need to make a large investment in modernizing our military.”

MM SIDENOTE — We do know how to deal with inflation. We deal with it by choking off growth through interest rate hikes.

Cohn also joked about how little Washington and Wall Street understand each other (which is arguably why MM is here). What do they no get about each other? “Everything,” he said according to Rich Rubin’s tweet. “There is a such a big disconnect between the two universes. It’s shocking to me.”

FIRST SPEECH FOR SEC’S JACKSON— SEC Commissioner Rob Jackson gave his first speech in the job on Thursday, criticizing companies’ use of dual-class share structures.

Via Bloomberg: “Jackson Jr. said such unique shares should eventually expire and become ordinary stock, so that regular investors aren’t permanently at a disadvantage to ‘corporate royalty.’” Read more.

** A message from SIFMA: Nationally, seniors lose an estimated $2.9 billion every year in cases of financial exploitation reported by media outlets, while only an estimated 1 in 44 cases is even reported to authorities. Together, we can do more to protect senior investors. Find out how at www.sifma.org/seniors.**

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES — Victoria Guida on the $614M in fines Bancorp will have to pay for failing to live up to its legal obligations to combat money laundering. To get Morning Money every day before 6 a.m., please contact Pro Services at (703) 341-4600 or info@politicopro.com.

DRIVING THE DAY — President Trump at one point had a tentative visit to Parkland, Fla. on his Friday schedule but as of Thursday night he was headed to Mar-a-Lago in West Palm with no visit to Marjory Stoneman Douglas High School listed … Import prices at 8:30 a.m. expected to rise 0.6 percent … Univ. of Michigan Sentiment at 10:00 a.m. expected to dip to 95.3 from 95.7 …

GUNS AND MONEY — Reuters BreakingViews’ Rob Cox: “When does taking a stand against social harm outweigh a financial objective? It’s a reasonable question for the likes of Lazard and BlackRock.

“The Wall Street investment bank advised AR-15 maker Remington on its restructuring days before Wednesday’s school shooting in Florida, perpetrated with a similar rifle – yet its asset managers talk about responsibility. So does Larry Fink, who runs BlackRock, the $6 trillion fund-management giant and top owner of firearms makers’ shares” Read more.

SEC REJECTS CHICAGO STOCK EXCHANGE TAKEOVER — POLITICO’s Patrick Temple-West: “The Securities and Exchange Commission on Thursday rejected the proposed acquisition of the Chicago Stock Exchange by a Chinese-led group of investors, halting a deal that had sparked an uproar on Capitol Hill and was criticized by … Trump during the presidential campaign.

“In an order on its website, the SEC said key parts of the deal were flawed. Those concerns were significant enough that the agency said it did not even need to address fears about Chinese government interference in U.S. markets, the main objection from critics.” Read more.

TAX CUTS ABOUT TO SHOW UP IN PAYCHECKS — POLITICO’s Brian Faler: “Workers should soon see changes in their paychecks after the government on Thursday released so-called withholding tables explaining to employers how to align people's paychecks with the new tax law.

“The government also said it's developing a new W-4 form — which allows employers to adjust how much tax to withhold based on a number of factors — for the next tax-filing season. The administration is asking employers to implement the new tables by Feb. 15 so that workers will begin seeing the effects of the Tax Cuts and Jobs Act, H.R. 1 (115), by next month.” Read more.

MARKETS

WALL STREET RALLIES FOR FIFTH STRAIGHT SESSION — Reuters: “Wall Street surged on Thursday to notch its fifth straight session of gains, led by Apple and other technology stocks as investors shrugged off recent inflation worries that sent the market into a sell-off at the start of the month. Apple Inc jumped 3.36 percent and contributed more than any other stock to gains on the S&P 500 after Warren Buffett’s Berkshire Hathaway made the iPhone maker its top investment.

“Markets were able to shake off economic data for a second consecutive session that indicated inflation pressures were building while weekly jobless claims data on Thursday pointed to a tightening labor market.” Read more.

CAN THE VIX REALLY BE GAMED? — FT’s Joe Rennison: “Never in its 25-year history has the Vix volatility index been in the spotlight the way it has been during recent market turmoil, when wild swings in the S&P 500 frightened investors. It was not just that the sudden return of volatility sent the Vix soaring.

“The index itself was implicated in the tumult, and the collapse of two exchange-traded products tied to the index was blamed by many traders for exacerbating a sharp drop in share prices. Now it has emerged that the Financial Industry Regulatory Authority, the U.S. finance industry’s self-regulatory authority, is looking into whether the index has been the victim of manipulation.” Read more

HIGHER RATES SUDDENLY FIT BULL CASE ON STOCKS — Bloomberg’s Joanna Ossinger: “If nothing else, the last two weeks have been a lesson in the hazards of pat narratives. Exhibit A is rising interest rates: are they good or bad for stocks? Going by this week, you’d have to say stock investors can manage in their presence. From an intraday low six days ago, the S&P 500 Index has rallied 7.4 percent, putting it on pace for the biggest weekly gain since 2014. All that as 10-year Treasury yields went from 2.85 percent to nearly 2.90 percent now.

“It’s a long way from two Fridays ago, when bond rates significantly lower than today’s were enough to spark an equity selloff that became the fastest correction in half a century. Call it an overshoot, call it fickle psychology — but don’t call it a break with how the two markets have usually interacted.” Read more.

FLY AROUND

TROUBLE AT COINBASE — The Verge’s Adrianne Jeffries: “A growing number of Coinbase customers are complaining that the cryptocurrency exchange withdrew unauthorized money out of their accounts. In some cases, this drained their linked bank accounts below zero, resulting in overdraft charges.

“In a typical anecdote posted on Reddit, one user said they purchased Bitcoin, Ether, and Litecoin for a total of $300 on February 9th. A few days later, the transactions repeated five times for a total of $1,500, even though the user had not made any more purchases. That was enough to clear out this user’s bank account, they said, resulting in fees.” Read more.

DON’T COUNT ON FASTER GROWTH — Jason Furman in a WSJ op-ed: “Most of what was good in the American economy last year was unsustainable, and most of what was sustainable was not good. A decade after the financial crisis, there is still no sign the economy can generate the consistent growth of 3% a year many continue to hope for.

“The growth rate for 2017 was just 2.5%, and even that seems unlikely to last. Is this the new normal? Not exactly. Instead it’s a return to the old normal, a reversion that was widely expected after baby boomers began to retire.” Read more.

POWELL SEEKS TO BURY ERA OF FED ‘BARONS’ — Bloomberg’s Christopher Condon: “Jerome Powell is the first Federal Reserve chairman in more than a decade to have any background in the private sector. That could explain changes he’s implemented in his first weeks on the job. Powell has made it clear within the institution he wants more direct interaction with the Fed’s army of Ph.D. economists, and on a faster and more informal basis than sought by his predecessors, according to two Fed insiders familiar with the moves and who asked not to be identified.

“The changes are more evolution than revolution, the people said. They build on other steps taken in recent years to relax a once-rigid system that strictly controlled the flow of information between politically appointed policy makers and the rank-and-file staff. Still, several former senior Fed officials said, it’s a notable shift in the way it flattens the central bank’s traditional hierarchy and further liberalizes internal communication.” Read more.

“This modern-day redlining persisted in 61 metro areas even when controlling for applicants’ income, loan amount and neighborhood, according to millions of Home Mortgage Disclosure Act records analyzed by Reveal from The Center for Investigative Reporting.” Read more.

BITCOIN SURGES BACK ABOVE $10,000 — WSJ’s Paul Vigna: “Bitcoin prices climbed back above $10,000 for the first time in two weeks after a sharp rally Thursday. Bitcoin traded as high as $10,218, according to CoinDesk, about 9 percent higher on the day.

“The volatile digital currency now stands about 72 percent above its recent Feb. 6 low, but about 50 percent below its all-time high from December. Bitcoin hit $10,000 for the first time at the end of November, and three weeks later, it had nearly doubled amid a wild speculative surge. It began 2017 below $1,000.” Read more.

MORTGAGES GET MORE EXPENSIVE — AP’s Alex Veiga and Josh Boak: “The cost of borrowing for a home keeps going up, a potential obstacle to would-be buyers at a time when home prices are at all-time highs in more than half of major U.S. markets. Average long-term mortgage rates have been rising steadily this year and are now at the highest level in almost four years. That translates into higher mortgage payments and more money paid out over the life of the typical 30-year home loan.

“Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages rose to 4.38 percent this week, up from 4.32 percent last week. That’s the highest rate since April 2014” Read more.

** A message from SIFMA: Did you know financial decision-making skills decline as we age? Unfortunately, financial exploitation of older adults is a serious and growing issue with devastating impact.

A New York State report found that 2/3 of all financial exploitation was committed by family members. Seniors can often lose the entirety of their retirement savings, leaving them unable to maintain independence and coping with significant stress and health impacts. As our country ages - 18% of the nation’s population will be 65+ by 2030 - the scope of this problem can only grow.

It is vital that we protect senior investors from financial exploitation. SIFMA is working with industry members, academics, and state and federal policymakers to advance policies, regulations and resources which enhance senior investor protections. Learn how you can make a difference at www.sifma.org/seniors. **

About The Author : Ben White

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.

About The Author : Aubree Eliza Weaver

Aubree Eliza Weaver is a deputy production director for POLITICO Pro, having previously served as a senior web producer. Aubree also co-authors Morning Money, POLITICO's daily morning newsletter on Washington and Wall Street.

She graduated from Le Moyne College in her hometown of Syracuse, N.Y., where she was the editor-in-chief of the school’s newspaper, The Dolphin. As a student, she interned with Time Warner Cable’s Syracuse affiliate, YNN, as a news broadcast intern. Aubree moved to D.C. upon graduating in 2013 to work as a summer program adviser for the Institute on Political Journalism. She was a student in the program in the summer of 2011, when she first fell in love with D.C.